Medical system board shake-up

UM chair, 9 others resign over dispute

interim CEO named

August 21, 2008|By Laura Smitherman | Laura Smitherman,Sun reporter

After months of acrimony and personality clashes at the University of Maryland Medical System, the board chairman and nine other directors resigned yesterday, and the remaining members installed new leadership at the health care powerhouse that oversees hospitals in Baltimore and around the state.

The board shake-up follows disagreements between some board members and Gov. Martin O'Malley over what they perceive as the governor's attempt to politicize the board and also between physicians and former Chief Executive Officer Edmond F. Notebaert over concerns that he ignored their interests. Notebaert announced last month that he would retire at the beginning of this month.

Tensions culminated yesterday with the resignation of Chairman John C. Erickson, who handed the gavel on an interim basis to Michael E. Busch, speaker of the Maryland House of Delegates and one of three board members from the General Assembly. Nine other members of the 27-person board also left, some in solidarity with Erickson, according to people who attended the meeting.

The remaining board members then chose Robert A. Chrencik, the chief financial officer, to step into the CEO role while they launch a national search for a permanent chief. In doing so, the board had to formally rescind an offer for the job to John P. McDaniel, who retired this year as CEO of the hospital system MedStar Health. McDaniel had been chosen by a slim majority of the board just two weeks ago.

"There were a lot of people who respected each other on both sides of the issue. Unfortunately, it had a sad ending," Busch said in an interview after the 31/2-hour closed-door meeting. "But with a reconstituted board and some new members, hopefully we can put the hospital system and the medical school back on track."

The turmoil has clouded the future of the University of Maryland Medical System, which underpins the local economy as the one of the state's largest private employers and delivers health care at hospitals and specialty facilities from the city to the Eastern Shore. The medical system also plays a critical role in educating many of the state's physicians.

The University of Maryland Medical Center, which is under the system, is one of the nation's oldest teaching hospitals. All of its doctors are faculty members at the university's medical school.

The General Assembly created the medical system 25 years ago as part of an effort to privatize the university hospital, which was run by the state and having financial troubles. Since then, other hospitals have been added to the system, most recently during the tenure of Notebaert, who aggressively pursued acquisitions. Notebaert didn't return phone calls for comment yesterday.

Conflicts bubbled

Conflicts over how the system is run bubbled to the surface in recent months. Physicians raised concerns about Notebaert's leadership in a June letter to Clifford M. Kendall, chairman of the University System of Maryland's Board of Regents, saying relations between the medical system and the medical school had "deteriorated to a point where the future of both institutions is jeopardized." The letter was signed by chairs of various departments.

Specifically, as the most recent example of the "fractured relationship," the doctors complained that Notebaert unilaterally blocked the system's insurance trust from issuing liability coverage to a physician practice outside the system. They contended that the move sets a precedent that could compromise their practice ventures throughout the state.

Some of the doctors took their concerns to O'Malley, who held several meetings with Busch, Erickson and Notebaert. At the same time, the board began deliberations on whom to name as interim CEO.

Inside vs. outside

A rift arose among board members over whether to choose an outside or an inside candidate. While some inside candidates were considered, the board voted to select McDaniel, but problems arose over possible conflicts because of his tenure with a competitor, according to board members. MedStar declined to comment on personnel matters, and McDaniel couldn't be reached for comment.

Meanwhile, over the last month, O'Malley made several appointments to the board, including some people who had not been recommended by the board. While governors have traditionally ratified nominees forwarded by the board, O'Malley had obtained advice from Attorney General Douglas F. Gansler's office stating that the governor does not have to follow those recommendations.

"The governor has made appointments that he believes will serve the long-term interests of the medical system and the doctors, researchers, students and support staff that have made the University of Maryland Medical System what it is today," O'Malley spokesman Rick Abbruzzese said.